The successes and failures of China’s 14th Five Year Plan

By Zach Slater

China is often stereotyped as an industrial powerhouse for which climate change is an afterthought, but the actual situation has far more nuance.

As one of the two largest economic forces on the planet, China has a pivotal role to play in combating the climate crisis. It leads the world by far in greenhouse gas emissions, producing 30.10% of the global share, almost three times as much as the next largest emitter, the United States. 2025 sees the final year of the PRC’s 14^th Five-Year Plan, a practice dating back to Mao Zedong where medium and long-term strategies for economic growth, social cohesion, and environmental protection are coordinated in a set of targets and policies. The current Five-Year Plan made the environment one of its key focuses, laying out short and long-term carbon emissions targets, as well as pushing for innovation in sustainability and green development. The next Plan is being drafted in late 2025 and formalised in 2026 in the meeting of the central government that sets out a unified vision known as the “two sessions”.

Against a backdrop of potentially spiralling US-China relations, an ever-worsening climate crisis, and a growing feeling of discontent amongst the youth of China towards their future, the Fifteenth Five-Year-Plan is expected to be decisive for the nation’s future. It’s therefore important that we assess the success of the previous Five-Year Plan as it draws to a close, and look at the overall progress China has made in combating climate change over the last few years, and what it means for the future.

The 14^th Plan explicitly set out its emissions goals, aiming to “Peak Carbon Emissions before 2030”, and setting two of the eight ‘binding targets of the plan “reducing carbon dioxide emissions per unit of GDP by 18% from 2020 level” and reducing “carbon intensity by 13.5%.” Shrinking fossil fuel usage is especially important for the PRC given the intense air pollution of the major cities in China. Four major cities in China have been classified as having an “unhealthy” to “very unhealthy level of air pollution for all those living there, with three more being deemed unsafe for those with certain health conditions (as per IQAir’s Air quality rankings). Air pollution is one of Xi Jinping ‘three tough challenges’ he has pledged to tackle. It is a clear misstep then that China’s coal consumption has increased every single year of this Five-Year Plan’s existence. From 2020 to 2023, Carbon Emissions produced by China increased by 1237.21 million square tonnes, a 10.3% increase. This is far worse than comparable economic bodies, such as the EU which has decreased its emissions by 5% in the same period, and the United States, who although its emissions have risen by 5%, has seen its total emissions trend downwards in the second part of that period. Carbon dioxide emissions per unit of GDP can be used as an indicator of how reliant an economy is on carbon dioxide consumption. On this front China has seen more relative success, decreasing from 0.45tCO₂/1k$ to 0.42, a roughly 6% decrease, but still far off from the 18% target. Even worse, when calculating carbon dioxide emissions per unit of GDP, data is based on territorial emissions, which often do not account for emissions embedded in traded goods. Thus emissions from international aviation and shipping are often not accounted for, and China is the world’s leading exporter of goods. Therefore not only does the existing data show China falling behind on its targets, but the situation may be worse than we can see.

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This is in spite of the fact that China is the world’s largest producer of renewable energy. They produce third of the world’s total renewable supply, as well as harbouring half of the world’s solar and wind farms and leading in hydroelectricity. Moreover, China continues to build more alternative sources of electricity, having 58 operable Nuclear power stations and 29 more under construction, as well as expansions to existing ones. Most prominently, Shidaowan Nuclear Power Plant, which is set to provide 4800 MW of electricity on its own. Furthermore, one of China’s largest development projects aims to add more alternatives to fossil fuels, with the Dalian Hydrogen-Based Energy Centre creating more hydrogen power, and Kela Power Station planned to be the largest hydro-photovoltaic (hydro and solar) power station in the world. However, as a proportion of China’s total energy consumption, renewables and nuclear are still far from being a viable solution to the country’s electricity needs. Coal still makes up 61% (2023) of China’s electricity sources, with 1,161 operational coal power stations, with more being developed. Mainland China’s total power station count almost exceeds that of the rest of the world combined. China’s coal fleet stands as a monolith in the face of our climate reality. Although the nation is moving positively towards renewables in the long-term, the scale of reliance it has on fossil fuels is almost impossible to undo in time to meet the carbon intensity targets of the Five-Year Plan, and it is set to be a challenging transition.

One of the suggestions made by the Five-Year Plan was the foundation of China’s very own Carbon credit system. To penalise those with high emissions and provide financial reward to those who operate more sustainably in the form of selling their carbon allowances. In 2021, the Emissions Trading Scheme (ETS) was implemented for the energy sector, learning from the failure of the previous scheme which ran from 2012-2017 that had little in the way of standardised carbon audits. The ETS is currently the largest carbon trading market in the world, and has strict compliance for those it covers. It mandates carbon emission audits, and any of those who exceed targets are obligated to purchase carbon allowances in order to offset their emissions, and the market has provided large valuations within the system. For instance, in 2021, the Hubei branch of the Agricultural Bank of China issued a groundbreaking pledge loan of £1.1 million for carbon emission rights to the Hubei Sanning Chemical Industry, demonstrating the growth and evolution of the ETS as a trading platform. In addition, 2024 saw the introduction of the China Certified Emission Reduction (CCER) program. Essentially, this allows sustainable enterprises, including solar, thermal, and wind farms, to sell their own carbon credits within the ETS, providing another avenue for finance amongst sustainable energy, particularly useful to the high-cost development of offshore wind farms. Whilst not having a large effect on emissions, providing financial incentives to reduce emissions and ensuring compliance in auditing is a step toward environmental sustainability.

There is also much to praise regarding opportunities for green investment and innovation created in China. The Five-Year Plan made a point in highlighting green solutions when it comes to innovation. Given the strict watch businesses in China enjoy, compliance with the central government’s agenda is of the utmost importance, and can be seen across China’s economy. For example, MYbank (one of the first private commercial banks to be piloted in China, and a subsidiary of Alibaba) has offered preferential loans to those who keep at a certain standard of emissions and environmental impact. In the first few months of the programme’s implementation in 2022, 420,000 micro and small-sized enterprises had received loans subject to those conditions. In addition, efficiency in electricity transmission further reduces the total amount of energy needed to power the country by eliminating waste, with a Gansu to Zhejiang and a Wuwei to Shaoxing ultra-high voltage transmission line beginning development in late 2024.

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Car emissions are another area where China has been ahead of the global curve in terms of being more environmentally conscious. China has dominated the electric vehicle field for many years now, with 12 million cars projected to be sold domestically in 2025, and sales projected to increase by 20% each forthcoming year, in the long term eliminating potential emissions from petrol and diesel vehicles. Similarly, the advancements made in public transport further reduce the need for regular car journeys. Currently in development is the bullet train CR450, a fully electrified, 400 km/h high-tech innovation, making a 12,000 km journey between Beijing and Shanghai into a 2 ½ hour trip with minimal environmental impact. The infrastructure is in place and the commitment to a sustainable future is clear, although long construction times could make these projects’ impact not truly felt by the 2060 deadline of carbon neutrality, and especially carbon use peaking before 2030. Nevertheless, the dedication to green investment and infrastructure by China is one of the Five-Year Plan’s tangible successes.

In summary, the Five-Year Plan’s numerical targets were far from fulfilled, with emissions on the rise and a heavily carbon-dependent economy holding China back from clear progress within the allotted half-decade. It is unlikely that emissions will have peaked before 2030. However, there is reason to hope that the 2060 deadline of net zero can be reached. Infrastructure and investment by the central government have created a framework for future environmental sustainability. Still, the scale of China’s coal consumption, and the nation’s immense energy demands means transitioning to a less polluting energy resource will require a herculean effort.

The rate China is currently moving is not enough, and more strict proposals must be made in the next Five-Year Plan if the government is serious about its commitments. China has consistently vetoed any international pressure to reduce its coal consumption, and if this attitude prevails in the next two sessions, then it serves as a damning sign for the years to come. The emphasis on green innovation is one of China’s definite achievements, but whether it is enough to impede China’s intense impact on the climate before the world is further and further past the point of no return is something that only time can tell.